I make around 600k. My employer has enough cash in the bank to give every single full time employee a bonus of more than half a million dollars. Net income per quarter is something like 100k per full time employee.
Yes, I am incredibly fortunate. Yes, I make a very very large amount of money compared to a typical american worker. Still, I capture only a fraction of the value I generate for my employer.
You and those employees can quit and start their own business and you can capture 100% of that value for yourselves.
If you don't want to do that, doesn't that admit the company is providing that value, not you?
For example, I know a top salesman at Microsoft. He'd call up a customer, drop in, get ushered right in to see the CEO, and close another sale.
One day, he decided to capture that value he was provided by working for a startup. He did not close a single sale the entire year. He could not get an appointment with any CEO. He finally quit and got his old job back at Microsoft.
Microsoft has produced a lot of people who made gobs of cash at Microsoft, and left to form startups for the easy money. Only to get a very rude shock about how hard it is to make money with a company.
// I make around 600k ... Still, I capture only a fraction of the value I generate for my employer.
There seems to be a two way street here. Presumably if you could make 600K or more by yourself, you'd be doing that rather than working for your employer.
Your employer, likely way before you got there, created an environment where you could come in and earn this much. If they and companies of that profile didn't exist, would you have a place to earn even 200K? So maybe you actually are splitting the value you are generating half-way.
Would you agree at least that the founders and initial employees took on the most risk and did the bulk of the heavy lift to get the company to that place? EG does the proverbial guy who ran the company out of his garage for 5 years funding it on his credit card deserve outsized reward for the risk and work he put in?
Yes, but the way shares work is that someone paid either the original founders or the company itself for a share, then someone paid that person, and so on. The current shareholders are certainly profiting, but they exist only because the company needed them to exist in order to create the company as it is now.
> I capture only a fraction of the value I generate for my employer.
I think this is a misunderstanding of how companies perceive value. You could be making your company a billion dollars a year, but if any schmuck off the street could do the same you're not actually providing much value at all. Your value is the difference between what you provide and what a similar replacement worker would provide.
Right, Mr. Meat's value to their company is at least $600k otherwise they wouldn't be making that much. We have no idea how high above that it is though even though the company is extremely profitable because they might be easy to replace for 700k
Exploitation is not about whether each party is making a lot of money, it is whether one party makes a disproportionate amount of money over the value the other party produces.
I think the word "exploitation" colloquially has the connotation of exploiting the poor as they cannot afford to leave the exploiting conditions.
Exploitation is labor is never usually headlined in the context of $400k/year salary. Technically, you're right. But we can take this to the limit, instead of $400k, let's say $4M/year for a job that's worth $5M/year? Are they "exploited". Yes, but not by the common use of the term.
Perhaps the reason for GP's take was that it robs away the colloquial definition of exploiration in an entirely different context where it's the least meaningful, i.e. exploitation of Bangladeshi child laborers vs. a programmer earning $400k year salary.
No, they are talking about the Marxist theory of exploitation, where excess profits belong to the workers. It is however not a very useful model in the real world when market principles like supply and demand have much more predictive power.
The first time I applied to work for a high frequency trading group in a hedge fund, my boss asked me what my desired comp would be? I replied 400k, to which he immediately responded saying that's extremely reasonable... So clearly, I f*** myself over in the negotiation.
No company in our capitalist society pays any worker at any level. What the worker thinks they are worth- they pay the worker the absolute bare minimum that they think they can get away with. Doesn't matter if it's an entry level job, or ( like mine) a high end algo trading outfit etc
That is the same principle in any market, not just the labor market. It is based on the laws of supply and demand, not what the product's "worth" is (how would you even know that at a large scale without price discovery?).
They're talking about exploitation in the Marxist sense, that excess profit belongs to the workers. Of course, I don't believe in the Labor Theory of Value, as supply and demand is a much more useful model of the world, but that's what they mean by exploitation, not what it's seen as colloquially.
